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S E C R E T SINGAPORE 000529
E.O. 12958: DECL: 06/04/2029
TAGS: OVIPSTEINBERGJAMESPRELMNUCECONSNCH
KN
SUBJECT: DEPUTY SECRETARY STEINBERG'S MAY 30, 2009
CONVERSATION WITH SINGAPORE MINISTER MENTOR LEE KUAN YEW
Classified By: Charge d'Affaires Daniel L. Shields.
Reason 1.4 (b) and (d).
¶1. (SBU) May 30, 2009; 6:30 p.m.; The Presidential Palace;
Singapore.
¶2. (SBU) Participants:
United States
-------------
The Deputy Secretary
Glyn T. Davies, EAP Acting Assistant Secretary
Daniel L. Shields, CDA (Notetaker)
SINGAPORE
---------
Minister Mentor (MM) Lee Kuan Yew
Chee Hong Tat, Principal Private Secretary to MM
Cheryl Lee, Country Officer, Americas Directorate, MFA
¶3. (S) SUMMARY: Deputy Secretary Steinberg used his meeting
with Minister Mentor Lee Kuan Yew to stress the importance of
Chinese cooperation in addressing the North Korea nuclear
issue and to elicit MM Lee's views on China and North Korea.
MM Lee said the Chinese do not want North Korea to have
nuclear weapons and do not want North Korea to collapse. If
China has to choose, Beijing sees a North Korea with nuclear
weapons as less bad than a North Korea that has collapsed.
MM Lee asked Deputy Chief of the People's Liberation Army
(PLA) General Staff Ma Xiaotian what China can do about North
Korea. General Ma's answer was that "they can survive on
their own." The Deputy Secretary noted that the DPRK could
have a fair and attractive deal if it would change its
approach. If not, North Korea faces a change of course by
the United States, the ROK and Japan. MM Lee said he
believes Japan may well "go nuclear." MM Lee also offered
views on the Chinese economy, Taiwan, Chinese leaders, and
U.S.-China relations. End Summary.
China and North Korea
---------------------
¶4. (S) Deputy Secretary Steinberg met with Singapore
Minister Mentor Lee Kuan Yew on May 30 on the margins of the
Shangri-La Dialogue, the annual international security forum
held in Singapore. The Deputy Secretary used the meeting
with MM Lee to stress the importance of Chinese cooperation
in addressing the North Korea nuclear issue and to elicit MM
Lee's views on China and North Korea. MM Lee said the
Chinese do not want North Korea to have nuclear weapons. At
the same time, the Chinese do not want North Korea, which
China sees as a buffer state, to collapse. The ROK would
take over in the North and China would face a U.S. presence
at its border. If China has to choose, Beijing sees a North
Korea with nuclear weapons as less bad for China than a North
Korea that has collapsed, he stated.
¶5. (S) MM Lee said he asked Deputy Chief of the People's
Liberation Army (PLA) General Staff Ma Xiaotian what China
can do about North Korea. General Ma's Delphic answer was
that "they can survive on their own." MM Lee said he
interpreted this as meaning that even if China cut off aid,
the DPRK leadership would survive. This is a leadership that
has already taken actions like killing ROK Cabinet Members in
Burma and shooting down a KAL flight. If they lose power,
they will end up facing justice at The Hague, like Milosevic.
They have been so isolated for so long that they have no
friends, not even Russia. They have not trusted China since
the Chinese began cultivating ties with the ROK, given
China's interest in attracting foreign investment, he said.
The Deputy Secretary noted that the DPRK could have a fair
and attractive deal if it would change its approach. If not,
North Korea faces a change of course by the United States,
the ROK and Japan. MM Lee expressed worry about the effect
on Iran if the DPRK persists. MM Lee said he believes the
DPRK can be contained and will not proliferate, but Iran has
very high ambitions, ties to Shiite communities outside Iran,
and oil wealth.
¶6. (S) The Deputy Secretary noted that North Korea's
decisions will have an impact in Japan. MM Lee said he
believes Japan may well "go nuclear." The Chinese must have
factored this into their calculations and concluded that the
prospect of Japan with nuclear weapons is less bad than
losing North Korea as a buffer state. The Chinese take a
long-term view and must think that within a few years the
DPRK's current leadership will be gone and there will be new
leadership, with new thinking. But there will still be a
North Korea, he said.
¶7. (S) MM Lee said he wishes the USG well in its efforts on
North Korea, but he would be surprised if the North Koreans
agree to give up nuclear weapons. They might give up a
first-strike capacity, but they want nuclear weapons in case
the USG decides to seek regime change. They are psychopathic
types, with a "flabby old chap" for a leader who prances
around stadiums seeking adulation. MM Lee noted that he had
learned from living through three and a half years of
Japanese occupation in Singapore that people will obey
authorities who can deny them food, clothing and medicine.
¶8. (S) MM Lee said the ROK, after seeing what had happened
with German unification, does not want immediate unification
with the DPRK. There is "nothing there" in the DPRK, other
than a military organization. Kim Jong-Il has already had a
stroke. It is just a matter of time before he has another
stroke. The next leader may not have the gumption or the
bile of his father or grandfather. He may not be prepared to
see people die like flies. China is calculating all this.
They have their best men on the job. They want to help the
United States to advance common objectives. But they do not
want the South to take over the North, MM Lee said.
Chinese Economy
---------------
¶9. (C) Regarding the Chinese economy, MM Lee said the global
economic crisis has hit many countries, but the feel on the
ground differs considerably from place to place. The Chinese
economy is reportedly in the doldrums, but when MM Lee
visited Jiangsu Province on May 24, his impression was one of
continued prosperity. Shanghai has been harder hit, with
container port traffic down 30-35 percent, similar to the
situation in Singapore. There is no sign of deep unrest in
China. The Chinese are very confident they will be able to
sustain eight percent growth. The government is pumping
resources into the economy, with a focus on developing
Western China. Whether such policies can be sustained for
three to four years is unclear, but China can certainly
sustain these policies for at least a year, he said.
¶10. (C) MM Lee stated that in the absence of a social safety
net in China, the Chinese savings rate is 55 percent,
exceeding even Singapore's 50 percent level. Consumption
accounts for only 35 percent of Chinese GDP, as opposed to 70
percent of U.S. GDP. The Chinese leadership may be loath to
shift permanently to a more consumption-oriented economy, but
the leadership will do so temporarily, if only to avoid
unrest. 20 million people have moved back to the countryside
because of economic dislocations. The government is
providing microfinance to facilitate the transition. The
pragmatists are in charge. There is nothing Communist about
it. They just want to preserve one party rule. The Deputy
Secretary expressed concern that current Chinese policies
designed to counter the economic crisis could undermine
reform. MM Lee said this cannot be helped. China wants to
prevent riots like the ones that happened in Guangzhou in
March when Hong Kong-connected enterprises suddenly shut
down, he said.
Taiwan
------
¶11. (C) The Deputy Secretary asked MM Lee for his assessment
of Taiwan. MM Lee said former President Chen Shui-bian had
left Taiwan in a weak economic position, which had enabled
President Ma Ying-Jeou to come to power with his pledge to
strengthen the economy through means including expanding the
three links with China. In Beijing, former President Jiang
Zemin was wedded to his eight-point approach, but President
Hu Jintao was more flexible. Jiang wanted to show he was a
great man by solving the Taiwan issue in his lifetime, but Hu
is more patient and does not have any fixed timeline. In
Chinese domestic politics, Hu had wanted Vice Premier Li
Keqiang from the Communist Youth League to emerge as his
successor, not Vice President Xi Jinping, but Hu did his
calculations and accepted Xi when it became clear that Xi had
the necessary backing from the rest of the leadership.
Similarly, on Taiwan, Hu will be pragmatic. It does not
matter to Hu if it takes 10 years or 20 or 30. The key is
building links with Taiwan. As in the case of Hong Kong, if
necessary the tap could be turned off, he said.
¶12. (C) In this context, MM Lee said, Hu could live with
Ma's positions on the '92 consensus and on not addressing the
reunification issue during his term in office. What mattered
to Hu was that Taiwan not seek independence. If that
happened, China has 1,000 missiles and is building its
capacity to hold the U.S. fleet at a distance. The implicit
question for Taiwan's leaders is if that is what they want,
MM Lee said.
¶13. (C) MM Lee stated that the alternative is Mainland
investment in Taiwan stocks and property. The Mainland has
already assured Hong Kong that it will help out economically.
The Mainland has not said this to Taiwan, but the Mainland's
Taiwan Affairs Director, Wang Yi, did urge Chinese companies
to invest in Taiwan. In four years Taiwan's economy will
pick up and Ma will win re-election. The DPP lacks strong
potential candidates. Su Zhen-chang is promising, but seems
unlikely to be able to win. Meanwhile, even the
traditionally DPP-supporting farmers in Taiwan's South need
China's market for vegetables and other products. Taiwan's
continued participation in the World Health Assembly depends
on Beijing. Beijing's calculation seems to be to prevent
Taiwan independence in the near term, then bring Taiwan "back
to China," even if it takes 40 or 50 years. MM Lee said he
is looking forward to visiting Fujian Province, where
preparations are underway for a new southern economic area
linked with Taiwan.
Xi Jinping
----------
¶14. (C) The Deputy Secretary asked if in the future a leader
like Xi Jinping would continue the policies on Taiwan
followed by Hu Jintao. MM Lee responded affirmatively. Xi
is a princeling who succeeded despite being rusticated. When
the party needed his talents, Xi was brought in as Shanghai
Party Secretary. Xi is seen as a Jiang Zemin protege, but in
another three and a half years Jiang's influence will be
gone. The focus now is on maintaining the system. There are
no more strongmen like Deng Xiaoping. Jiang did not like Hu,
but could not stop him, because Hu had the backing of the
system and he did not make mistakes.
Wang Qishan
-----------
¶15. (C) MM Lee said Vice Premier Wang Qishan, whom the MM
saw in connection with celebrations in May of the 15th
anniversary of Singapore-China Suzhou Industrial Park, is an
exceptional talent, very assured and efficient. Wang handled
SARS superbly when he was in Hainan. He excelled in
coordinating the Beijing Olympics. Li Keqiang may not get
the Premiership and the Party is looking for a way to keep
Wang on past his 65th birthday until he is 70. MM Lee said
he had met first Wang back in the 1990s but had forgotten
their meeting. This time when they met, Wang told Lee he had
reviewed the records of all Lee's meeting with Chinese
leaders going back to the days of Deng Xiaoping to see how
Lee's thinking had developed. Wang told Lee he respects him
as a consistent man.
China's Rise
------------
¶16. (C) MM Lee said China is following an approach
consistent with ideas in the Chinese television series "The
Rise of Great Powers." The mistake of Germany and Japan had
been their effort to challenge the existing order. The
Chinese are not stupid; they have avoided this mistake.
China's economy has surpassed other countries, with the
exceptions of Japan and the United States. Even with those
two countries, the gap is closing, with China growing at
seven-nine percent annually, versus two-three percent in the
United States and Japan. Overall GDP, not GDP per capita, is
what matters in terms of power. China has four times the
population of the United States. China is active in Latin
America, Africa, and in the Gulf. Within hours, everything
that is discussed in ASEAN meetings is known in Beijing,
given China's close ties with Laos, Cambodia, and Burma, he
stated.
¶17. (C) MM Lee said China will not reach the American level
in terms of military capabilities any time soon, but is
rapidly developing asymmetrical means to deter U.S. military
power. China understands that its growth depends on imports,
including energy, raw materials, and food. This is why China
is working with South Africa on the China-Africa Development
Fund. China also needs open sea lanes. Beijing is worried
about its dependence on the Strait of Malacca and is moving
to ease the dependence by means like a pipeline through Burma.
Build Ties with Young Chinese
-----------------------------
¶18. (C) MM Lee said the best course for the United States on
China is to build ties with China's young people. China's
best and brightest want to study in the United States, with
the UK as the next option, then Japan. While they are there,
it is important that they be treated as equals, with the
cultural support they may need as foreigners. Why not have
International Military Education and Training (IMET) programs
for China? Why not have Chinese cadets at West Point
alongside Vietnamese cadets and Indian cadets? America's
advantage is that it can make use of the talent of the entire
world, as in Silicon Valley. China still tends to try to
keep the foreigners in Beijing and Shanghai. MM Lee noted
that his own experience as a student in the UK had left him
with an enduring fondness for the UK. When he spent two
months at Harvard in 1968, an American professor had invited
him home for Thanksgiving. This was not the sort of thing
that happened in the UK, and Lee had realized he was dealing
with a different civilization. In the future, China's
leaders will have PhDs and MBAs from American universities,
he predicted.
¶19. (U) The Deputy Secretary has cleared this message.
Visit Embassy Singapore's Classified website:
http://www.state.sgov.gov/p/eap/singapore/ind ex.cfm
SHIELDS